Bullish momentum grips PSX as Pakistan, US strike strategic trade deal

The Pakistan Stock Exchange (PSX) saw bullish momentum on Thursday, as investors rejoiced after the US struck a trade deal with Pakistan.

At close, the benchmark KSE-100 index settled at 139,390.42 level, an increase of 978.17 points or 0.71%.

Analysts attributed the buying spree to investor optimism after the US and Pakistan struck a deal that will result in lower tariffs for the South Asian nation, as well as an agreement in which Washington will help develop Islamabad’s oil reserves.

“We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves,” US President Donald Trump wrote on social media on Wednesday.

“We are in the process of choosing the Oil Company that will lead this Partnership.”

Trump’s social media post did not provide further details.

Meanwhile, Pakistan’s Finance Minister Muhammad Aurangzeb, in a video message on Thursday, termed the trade deal a “win-win” situation for both countries.

“We are in a good place today in Pakistan, in terms of where we have arrived before August 1. We have come a long way in terms of our overall strategic partnership between Pakistan and the United States,” he said.

Pakistan faced a potential 29% tariff on exports to the United States under tariffs announced by Washington in April on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place.

US total goods trade with Pakistan was an estimated $7.3 billion in 2024, according to the website of the Office of the US Trade Representative, up from around $6.9 billion in 2023. The US goods trade deficit with Pakistan was $3 billion in 2024, a 5.2% increase over 2023.

On Wednesday, the PSX experienced a mixed day of trading with some indices posting gains as the State Bank of Pakistan kept the policy rate unchanged at 11%.

The KSE100 rose by 447.43 points, or 0.32%, reaching 138,412.25 points from its previous close of 137,964.82 points.

Internationally, Asian equities slipped on Thursday after weaker-than-expected Chinese activity data and a plunge in copper prices, while investors weighed a trade deal between South Korea and the US

The dollar held near a two-month high as investors weighed a Federal Reserve decision to hold rates steady and strong earnings from megacap tech firms.

Nasdaq futures surged 1.2% after better-than-expected earnings from Microsoft and Meta Platforms.

S&P 500 futures advanced 0.8%, while the US dollar held steady after hitting a two-month high.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.7%, though still on track for its fourth consecutive monthly gain in July.

Meanwhile, the Pakistani rupee maintained its upward trajectory against the US dollar, appreciating 0.03% during trading in the inter-bank market on Thursday. At close, the currency settled at 282.87, a gain of Re0.08.

Volume on the all-share index increased to 577.35 million from 425.84 million recorded in the previous close.

The value of shares rose to Rs36.35 billion from Rs24.99 billion in the previous session.

B.O.Punjab was the volume leader with 82.94 million shares, followed by Invest Bank with 37.15 million shares, and Oil & Gas Dev with 24.21 million shares.

Shares of 483 companies were traded on Thursday, of which 235 registered an increase, 215 recorded a fall, while 33 remained unchanged.